The Sudanese economy will improve in 2022 provided the political and security situation remains stable, according to economic expert Hasan Bashir.
In an interview with Radio Dabanga, Dr Hasan Bashir, professor of economics at El Nilein University in Khartoum, spoke of the expected loans, grants and investments that will help improve economic conditions in the country.
The decline in inflation rates and the trade balance deficit, as well as the stability of exchange rates are signs of an improvement in the economic situation. “We can take these developments as an indication that the reform policy adopted by the government has started to bear fruit,” he said.
âThe International Monetary Fund (IMF) expects an economic recovery and growth in the country next year. Yet if the economic indicators remain stable until the end of the year, we can take it as proof that the economic recovery has started, âhe noted.
The great shortage of foreign exchange in the country has been reduced by the loans, grants and funding of foreign exchange projects received from various international parties this year. So far, the total stands at $ 4.165 billion, according to the economic forum held last month.
He also mentioned the positive effects of institutional reform, improved tax and customs revenue and reduced gold smuggling. The government should also find a solution to the huge sums of money outside the banking system, “even if it has to change the national currency”.
Bashir further expects a further increase in inflation rates when implementing the 2022 budget. “The cancellation of tax exemptions, the introduction of new taxes and fees, and the expected increase in wages may negatively affect inflation rates, “he explained.
The economist did not rule out that the current fall in inflation rates is the result of persistent economic stagnation. “But the fall in inflation rates resulting from the improvement in the trade balance remains a good sign.”
He praised the ongoing institutional reform and government capacity building programs in cooperation with international financial institutions, the United Nations and foreign companies. “Tax reform should, however, be carried out in such a way as to limit the effects of the general budget on rising inflation rates.”
On the social effects of the economic measures taken by the Sudanese government this year, and in particular the removal of fuel subsidies, the economic expert confirmed that they have caused a further decline in the purchasing power of most Sudanese.
âThe Samarat support program and the My Commodities program make life a bit easier, but not enough,â he added. “So let’s hope that our predictions will be true and the life situation will improve for the average Sudanese in 2022.”
Economist Sidgi Kaballo and financial analyst Hafiz Ismail earlier expressed strong reservations about the government’s economic policy. The removal of subsidies conditional on the IMF is disastrous for the population, Ismail told Radio Dabanga in June. According to Kaballo, the government should have started by improving internal mechanisms before implementing IMF conditions and removing subsidies on commodities.